Joshua Kahr

MLSs Will Evolve With Consumer, Broker Needs in Mind Most MLSs rapidly adopted the residential real estate practice changes ahead of the implementation deadline. But how are they continuing to evolve to meet the needs of the industry and the public in this new landscape? That question generated a lot of buzz at NAR NXT: The REALTOR® Experience in Boston earlier this month. In various forums, MLS executives, brokers and attorneys discussed the challenges of data sharing and privacy, how MLSs communicate their value, and how individual players will fare through the continuing disruption taking place in real estate. An Efficient Marketplace Although the panelists at a Nov. 9 discussion entitled “The Future of the MLS” brought a range of views, none wanted to contemplate transacting real estate in a world without MLSs. “If MLSs didn’t exist, we’d have a very fractured market,” said Art Carter, CEO of the California Regional MLS, with more than 100,000 users. “If we didn’t have [MLSs], we would invent one,” said Errol Samuelson, chief industry development officer for Zillow. He spelled out the intrinsic values of MLSs: namely, that MLSs give sellers maximum exposure for their home and a source for strategic pricing information; they give buyers equitable access to homes on the market; and they give real estate professionals and policymakers an authoritative source of timely, accurate data. Those who compare the experience of U.S. consumers to those of other countries often fail to understand the costs and barriers that exist in other places, Samuelson said. “[People] compare home sales [in the U.S.] to how they’re done in Australia, but Australia is a … subpar experience. … It’s cheaper to transact in the U.S. than in Australia, because we have a very efficient marketplace.” “I do believe in a strong MLS,” Reffkin said. “In New York City, where there is not a strong MLS, cleaning the data costs more money than in every other MLS combined. If every MLS were the same as New York, it would sink brokers.” In years past, the industry often referred to MLSs as the source for cooperation and compensation information. Referring to the rule that REALTOR® association–operated MLSs may no longer show offers of compensation for buyer’s agents, Donnellan asked the panelists whether MLSs could survive with offers of compensation removed. In answer, Carter pointed to research conducted by CRMLS. “We asked brokers what they valued most in the MLS. There was not one mention at that time of compensation being listed as key,” he said. “It was the transparent marketplace and the accuracy of the data.” “What matters is that it’s accurate and fairly presented. [For example], I can’t pay more to bump my listing to the top,“ said Lovett-Menkiti. Her agents are adapting to the practice changes—and are getting paid, she said. “Our agents work very collaboratively across different brands when they need to get information.” - nar.realtor

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'The group discussed various real estate development deals, including a potential sale of a site in the Bronx and evaluating the feasibility of a project based on factors such as land value, loan-to-value ratio, exit cap rate, and potential profit. They also discussed challenges and opportunities in real estate development, including obtaining access agreements, securing financing, and navigating zoning and inclusionary housing requirements. Finally, they estimated construction costs for a joint venture project and expressed concerns about optimistic cost estimates provided by contractors.' The above is an extract from a zoom meeting generated by the AI note taker. I was initially skeptical of AI and how it would impact my day to day working life, now seems to be incorporated more and more. Shout out to our Chief AI Officer Lera Khozhieva !

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Summary of Aug: 1, 775,027 registered users were active on uhomes.com, which was 66.8% higher than last August. 2, 8,300+ students finally booked rooms on uhomes.com, which was 50% higher than last August. 12% of August bookings were non-Chinese students and the biggest non-Chinese market was India. 3, UK was still our largest market and its growth rate was 48.86%. And I personally think the growth in the next 2 months will continue. 4, Australia market grew 136%, a lot of them were short term stay for a few weeks. Maybe it was influenced by the new government regulations. Because of the Cap of international students for 25/26, we are not confident as before about Australia market in the next few months. 5, North America market was a little bit lower than last August, the main reason should be Canada. 6, Asia is still very prosperous and its growth rate was 102.7%. We are very confident Asia will be good for 25/26 and many Asia universities have started to issue offers to applicants from this August which was 2-4 months earlier than history 7, Europe market was still small but we got 193% growth. Although uhomes.com grew a lot in this August, I think the main reason should be because last August we had very few availabilities to sell. As for this September, it’s very possible for uhomes.com to have another 50%+ growth.

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Another well written and timely piece by Catherine Leffert. LTV can indeed be highly misleading. We noticed the fallcies of over-relying on LTV back around 2011. At that time, it was the reverse problem because we were getting false positives of bank failures when running stress tests. It turned out that we were too dependent on the appraised value of a property and not adjusting it for vintage. For example, we saw banks putting new loans on the books after the 2008 Financial Crisis and in the worst part of the recession at a relatively high LTV (say 75%) -- say between 2009-12. However, since those loans were originated after the crisis, proprety values had already crashed by then. Therefore, the "V" in the LTV equation was at a depressed value at the time of the appraisal. This ironically meant that the loan was underwritten very conservatively despite its relativly high LTV because there was far more upside appreciation potential in the "V" than downside risk at that time. When we adjusted the stress tests to reflect this idea of rightsizing the "V" based upon vintage, we got far more accurate results. In other words, give me a CRE loan with a 75% LTV but originated in 2010 all day long over a similar CRE loan with a 60% LTV but originated in 2007. Ditto is true for loans originated at a higher LTV in 2024 vs a lower LTV in 2021. Banks should make use of CRE indicies from companies such as Co-Star and GreenStreet to right size their valuations to current levels. They are not perfect, but both have free indicies that can be used. You can get very granular behind a pay wall by looking at indicies for differnet combinations of market and property type. They also have both Equal Weighted and Value Weighted indicies. Community banks can make use of the equal weighted indicies to get a better comp to their markets. Analyzing cap rates also is a good idea. Just keep in mind that the spread between cap rates and say the 10-year treasury can vary greatly, so i actually prefer using indicies because that combines changes in both NOI levels and cap rates. I also like looking at debt yields (NOI / loan balance) to get a sense of a lender's margin of safety if it has to rely on the collateral. This all assumes the cash flows are still okay for a given property. If the cash flows are or will be tanking, then youve got bigger problems and your LTV is useless.

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Rent control does not work. New York City Community Bank has had a 990% spike in multifamily delinquency tied to rent controlled apartments. With current losses projected at $1.5B. The bank is currently selling off assets to offset losses. I'm a huge fan of affordable housing but rent control is not the answer. In 2019, NYC passed the Housing Stability and Tenant Protection Act. The law primarily affects apartments built between 1947 and 1973, which encompasses around 1 million units. The law severely restricts a landlord's ability to raise rents, charge late fees or evict existing tenants. With increased timelines for non-payment, an inability to charge late fees for evicted tenants, and punitive charges for illegal eviction. The law also curtailed some loopholes by which property owners had previously been able to remove buildings from the program. Loopholes which were often priced into their valuations. Which leads us to where we are now. With $1.5 Billion in losses and several hundred million more projected as the interest rates on the notes reset from say 3% to 7% even as the actual Net Operating Income (NOI) may have actually decreased. Commercial real estate loans are amortized for 20-40 years depending on asset type and loan type. However, the debt is only locked for 5-10 years (with a few exceptions). Theoretically, NOI will have increased sufficiently to offset the increases in interest rates and allow for the takeout of the existing debt, but in this case it's not. With expenses actually outstripping allowable rent increases. While the article focuses on the severe economic losses at the bank level. Losses that almost led to the bank's collapse earlier this year. It does not discuss the real impacts on the properties themselves. As I mentioned the other day, banks are generally not eager to foreclose on commercial real estate. It forces them to book the actual losses. Which means that many of these buildings have likely been in trouble for years. During that time, the owner would have no incentive to do any repairs or upgrades. So yes, the people living in those apartments wouldn't see major increases, but they may also not have working toilets. Further, the buildings, which are older, would likely start to degrade overall. When you underwrite a loan on an older building you pro-forma in more capital expenses, because old pipes break, sewer lines fail, brick has to be tuck-pointed, and repairs may involve lead based paint or asbestos remediation. The overall result of the "Tenant Protection Act" is crumbling buildings, failing banks and substandard living conditions. https://lnkd.in/echg8xXV

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Some detailed analysis on how the housing market has been impacting storage, based on takeaways from UBS research from a few months ago: These aren’t direct quotes. During the peak, customers with an HHI $100k+ made up about 40% customers. This has since dropped to 22%. Other income brackets have maintained similar share throughout the peak. During the peak, customers aged 35–54 represented 35% of customers. Today, they account for just 22%, with other age groups also showing stable shares as well. They also found that customers with shorter stays tend to have higher HHIs, while those with longer stays have lower HHIs. The avg HHI reduces with customer length of stay. ——— My interpretation. It makes sense that higher-income earning customers are often temporary customers when considering migration-related costs and relocating for new opportunities, or home purchases. The variance in HHI based on CLS aligns with different storage needs requiring different durations. Think of the profile of those that need storage for moving into a new home vs. another for long term use like a party supply rental business—different customer profile. The average consumer today may be more price-sensitive, as the 35–54 age group (especially those with higher HHI) is historically the least price-sensitive; data shows that group declining significantly in share since the peak. We chalk things down to “the housing market is sluggish due to interest rates, therefore demand is low.” Which is true. But it’s also true that we can learn so much more about what’s going on a more granular level. I’m just grateful that there are smarter folks with better resources doing great work digging into this stuff. I collect and comment on data, but there are many out there doing some incredible work to advance our understanding of the space--they deserve a lot of credit.

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I know, not everyone is interested in CMBS loans. However, a CMBS resurgence could benefit CRE professionals. Rather than reading the entire article, allow me to extract and summarize four major themes you should be aware of. 1. The CMBS market has seen a significant rebound in 2024, with private-label CMBS issuance reaching $32.2 billion, compared to $13 billion during the same period in 2023. After dealing with CMBS loans and servicers for years, some of my clients refuse to consider another CMBS loan. What has changed? “If you need money and are (a) in position to refinance a loan and you don’t have an alternative, it becomes your go-to source and potentially your only source for financing.”  No other options! 2. The decline in commercial bank CRE lending, influenced by the regional banking crisis of 2023, has driven borrowers towards CMBS as a financing alternative. Yes, many banks are still on sidelines. “Banks are in retrenchment mode so there’s a huge liquidity crisis that’s going on, and CMBS is stepping to fill that liquidity crunch. It’s a combination of a gap in the market because of regulatory pressure, credit pressure and balance sheet pressure.” But someone must buy the CMBS bonds. Are they selling? 3. There is a strong demand for CMBS from investors, with $24.6 billion in new CMBS securities purchased year-to-date through May, nearly three times the amount in the same period in 2023. Why now? Are spreads better? “Spreads for CMBS were historically in the 50 bps range. If they’re making 250 basis point spreads (today), that’s a huge profit for them. Higher spreads are always lucrative for lenders, who charge interest paid on the loan based on the difference of what they’re buying the money for and what they’re selling it for" Even with higher spreads, are the loans attractive to borrowers? 4. CMBS offers competitive rates and terms compared to available options, because there are fewer. “Your options as a borrower, particularly from traditional banks, have dried up materially, compared to the CMBS market, which is still very liquid. While it does come with some headaches when dealing with an asset that underperforms, or goes into special servicing, overall CMBS is available and a better option than it was last year." A CMBS execution may not be your favorite, but it could be the best and only option for a less-than-stellar performing property. Look at it this way, still better than a foreclosure or capital injection.  #cre #commcap #crelending #creinvesting #CMBS

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📢 Our latest #cushmanwakefield market reports are now available! 🏢 Real Estate Investment: Q3 saw a decline with €197M in transactions, but optimism remains as significant deals are expected by year-end, led by active domestic investors. 🏬 Office Market: Stability persists despite higher vacancy rates. Construction activity is up 94% y-o-y, and demand for prime office space continues to be solid. 🏭 Industrial Sector: Although demand fell compared to the previous quarter, it remains strong year-over-year. Prime rents are stable, and speculative construction is ongoing. 🛒 Retail: Shopping centres are improving, with lower vacancy rates and higher footfall. Retail parks continue to expand, and retail park rents are slightly up due to demand. 🏨 Hospitality: Prague leads the CEE-6 region in RevPAR growth, up 11.5% YTD. Recovery continues, supported by lower financing costs and expected market activity. our reports are available to read here:https://lnkd.in/eE2J6BHS The recovery may be slow, but there are encouraging trends across sectors. #CWCzechRepublic #CWCzechia #Cushwake #MarketBeats #CZMarketBeats #Insights #BetterNeverSetlles

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🎉 BIG NEWS! The long-awaited housing deal has finally passed! Here are the key details you need to know: 1️⃣ Rent stabilization: The new law will protect over 1 million rent-stabilized apartments in NYC. 2️⃣ Affordable housing: The deal includes a $25 billion investment in affordable housing, creating 100,000 new units. 3️⃣ Eviction protections: Tenants will have stronger protections against evictions, with new requirements for landlords. 4️⃣ Rent increases: The law limits rent increases for rent-stabilized apartments to 3% per year. 5️⃣ Vacancy decontrol: The controversial vacancy decontrol policy has been eliminated, meaning landlords can no longer deregulate apartments when they become vacant. This is a major win for tenants and affordable housing advocates, and a significant step towards addressing the housing crisis in NYC. Let's celebrate this victory and continue pushing for more affordable housing solutions! #HousingDeal #AffordableHousing #NYC #RealEstate #TenantRights

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Why Is Office-To-Residential Conversion So Difficult To Get Done? In NYC, there is a low availability rate of apartments and a glut of B and C-level office buildings with low occupancy. Perfect, right? So why is office-to-residential conversion occurring at such a relatively slow pace? This is true even with the recent announcement of the planned conversion of Pfizer headquarters to housing. Jonathan Miller, CRE®, Member of RAC described many of the issues in a recent HousingNotes article 'The Challenge Of Office-To-Residential Conversions – Red Stapler Edition'. These are his bullet points with broader explanations in the article here https://lnkd.in/eQaPVW-5 - More Time Needed - Construction Costs Are Higher - Large Floorplates Are Often Not Feasible - Most Municipalities Can’t Afford To Subsidize - Zoning Variances And Community Approvals - Vacancy Rates Are Misleadingly Low _____________________________________________ If You Are Buying A Home Or Commercial Property In New York State… Did You Know That Title Insurance Companies Are NOT All The Same, Including The Cost? And, it’s your RIGHT to choose the title company you want to use! That's Where Your Due Diligence Comes In! Read '10 Significant Ways That Hallmark Abstract Service Differentiates Itself From Many New York Title Insurance Providers!' here https://lnkd.in/eTQAWCdH. Questions? Contact us at [email protected] or (516) 741-4723. Hallmark Abstract Service...You Buy Real Estate, We Protect It! #adaptivereuse #affordablehousing #housingcrisis #architecture #construction #residential #NYC #NYCrealestate #refinance #CMBS

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Great post and perspective from Logan D. Freeman. I had to repost and open my big mouth on why the #officeapocalypse is just as real and just as big as last cycle's #retailapocalypse. Here's the rundown.... Office is playing out eerily similar to Malls during the GFC in terms of demand, costs, recovery, write-downs, etc. We're in the early stage, 3rd inning IMO, of a trifurcation of office assets wherein, roughly: - 1/3 of assets are effectively obsolete and worth salvage value - 1/3 will perpetually operate in the black (Zombie offices) - 1/3 will continue to kick ass and make $$$ To Logan's point $2T in losses is a drop in the bucket at surface level. However, diving deeper into capital markets- leverage, bank concentration ratios, CECL, ALLL & reserves, carry/stabilization costs, deposit costs, yield curves, IRRs, etc.- a mere $2T in levered losses REALLY jams up the economic engine like 20% diesel in an F-35. The good news is with a little bit of luck, and some great #loansales, we'll get through this bigger, better and bolder than ever, but that could also be my eternal optimism speaking. What do you think???

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🚨 CMBS Alert: Office Delinquencies Double in Just One Year! 🚨 -Moody's 📉 CMBS Delinquency Rates on the Rise 📉 The latest CMBS Troubled Loan Tracker reveals troubling trends across the commercial real estate (CRE) landscape. From office distress to rising multifamily defaults, the numbers paint a clear picture of market strain. 📊 November 2024 Snapshot: Key Metrics at a Glance Conduit & Fusion CMBS Loans 🔺 Delinquency Rate: Up 2.4% YoY to 7.4% Office Loans: Surged to 11.2%, more than doubling from 5.3% last year. Highlight: A $350M loan for 225 Bush in San Francisco (44% occupancy) drove much of this increase. Multifamily Loans: Jumped to 3.5%, from 1.9% in Q2. Key driver: A $200M loan for 180 Water Street in NYC failed to mature. Hotel Loans: Climbed to 6.0%, with major contributions from Midwest Marriott properties. Large-Loan, Single-Asset, Single-Borrower (LLSASB) Loans 🔺 Delinquency Rate: Increased to 7.0%, up from 4.76% last year. Hotel Sector: Biggest jump at 8.78% (+243 bps). Office Sector: Now at 10.7%, up 147 bps. Special Servicing Trends Conduit Loans in Special Servicing: 9.9%, up 18 bps from October, led by office loans like 225 Bush and 5 Penn Plaza. LLSASB Special Servicing: Rose sharply to 8.75%, with office loans nearing 15%. 💡 What’s Driving the Numbers? Maturity Defaults: Now 45.3% of conduit CMBS delinquencies—up dramatically from just 11% in 2018. Extension Relief: Many loans are leaving delinquency status due to extensions, not payoffs, highlighting ongoing credit stress. Credit Access Concerns: High delinquency volumes and tighter refinancing conditions spell continued pressure on the CRE market. 🚨 What’s Next? Expect office distress to dominate, but watch for further multifamily cracks as valuations slip. Industrial remains a bright spot with minimal defaults. 🤔 What do you think these trends mean for the broader CRE market? Let’s discuss! 📌 Follow me for ongoing updates and actionable insights into CMBS, distressed debt, and CRE trends. https://lnkd.in/g-qR_-zE

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So how many of you/us Real Estate Developer types can continue doing business after a $1B default much a $1M default. This is the classic double standard, different strokes for different folks. https://lnkd.in/gTrfGPyn

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95% of CRE Brokers Do Not Understand Leverage... Almost all of them think they do, but in my opinion - most are missing out on the most important type of Leverage. "But I work with Bankers every day and there's debt on almost every deal I do!?" This is not the type of Leverage I'm talking about. There's 4 types of Leverage that can be broken down into 4 C's: Capital, Code, Content, and Collaboration. The Collaboration part has probably been the number 1 growth factor for my business. Collaboration allows Leverage on your Time. In my opinion, the key to the "game" of business is to continually trade up for more Leverage on Your Time. At first, you have to do the $10/hr tasks. But once you're making $50/hr, you can hire someone for $10/hr. And then when you're making $200/hr, you can hire someone for $50/hr to do the tasks you shouldn't be doing. After that, you continue to gain more leverage on your time, and execute the tasks that are the most influential to your business, and that you genuinely enjoy doing. So, if you're a CRE Broker and are not using Leverage in your business... I would recommend you start thinking about it. And if you want to know how I structured this Leverage to scale to $1.4M in Gross Commissions in a Single Year - Just reply to this post or DM me. No sales pitch - just happy to help however I can.

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“Multifamily CRE also faces cyclical challenges from oversupply and rent control issues in select markets, but the supply-demand imbalance is expected to resolve over time. In the meantime, inflated operating expenses and still-elevated interest rates continue to pressure net operating income for multifamily borrowers, especially those on interest-only loans. Pressure from multifamily CRE should remain within ratings expectations for U.S. banks.”

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Zillow expects Ohio’s Biggest cities to be among country’s hottest housing markets This Story Comes from https://spectrumnews1.com/ and it talks about the hottest real estate markets. "Even with elevated interest rates, it never seems like houses stay on the market for very long. And now there’s a new list that shows Ohio may be home to the hottest market in the entire country. “When you think of Ohio, you think of those top three — you think of Cleveland, Columbus and Cincinnati. And you cannot go wrong with all three,” said Morgan Shawver, a real estate agent and recent first-time home buyer. “The best thing you can invest in on earth is earth so being able to own a little part of land or a home and then building that equity it snowballs, and I think the younger people and our generation they’re just starting to learn that." According to the predictions from Zillow, the Ohio real estate market is benefiting from those lessons. The Buckeye State is the only one to boast three cities in the top 10, with Cincinnati and Columbus taking the second and third spots on that list, respectively. Cleveland ranks eighth. “This state encompasses just about everything. You have Ohio State University, you have Ohio University, all these bigger colleges even just within a few hours of Columbus, you just have so much affordability and so much growth that is going to happen so we just loved it,” Shawver said. Zillow used factors like strong demand, steady home values, job growth and a growing number of homeowners all play a part in the rankings. The website predicts Columbus will have a higher percentage of new owner-occupied homes than any other major metro area this year. Ohio’s capital city jumped 17 spots from last year, while Cleveland fell two spots from 2023. “I just think again there’s so much growth going on in all three. In Cleveland you have professional sports, in Cincinnati you have professional sports, Columbus you have such a good base of things to do, but also young professionals can come here and really plant their grounds and do so much in all three of those, but also right outside of three of those cities are such great school systems and can be a great place to raise a family,” Shawver said. Meanwhile, with companies like Intel, Google and Amazon adding new positions in the Buckeye state, it could add up to a housing boom across the state. “All three have so much to offer no matter where you are in your life. It has just been amazing to watch all three of those blow up, especially now with Intel coming too. I just think all three are going to continue to grow,” Shawver said." The key is cost of living and Jobs and Cleveland Ohio has all that in spades. Need good real estate to create income and wealth with? Call me (Brett) 216-703-5740 Key Realty and Property Management 1200+ Properties and Counting #realestate #propertyinvestment #propertymanagement #realestateagent

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NAHB predicts a significant pullback in multifamily starts for 2024. Are we surprised? Multifamily Developer Confidence is in Negative Territory. In the fourth quarter of 2023, multifamily developer confidence remained in negative territory, as revealed by the Multifamily Market Survey (MMS) conducted by the National Association of Home Builders (NAHB). The survey produces two key indices: the Multifamily Production Index (MPI) and the Multifamily Occupancy Index (MOI). The MPI, which gauges sentiment about current production conditions in the apartment and condo market, scored 41, below the break-even point of 50. Meanwhile, the MOI, measuring the industry’s perception of occupancies in existing apartments, registered 77. Tight lending standards and high development loan costs continue to hinder financing for new multifamily projects. Given the substantial supply of multifamily units under construction, NAHB predicts a significant pullback in multifamily starts for 2024 #realestatedevelopment #realestateinvesting #passiveincome #multifamily #realestate #multifamilyinvesting #multifamilyrealestate #firsttimedeveloper #raisemasters30 #cre #financialfreedom

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🚨 New York’s Housing Crisis: A Post-421-a Landscape 🚨 More than two years after the expiration of the 421-a tax incentive, developers and lawmakers are navigating new territory with the introduction of 485-x, passed in late April. The backdrop? A severe housing crisis in NYC, where rents have soared to all-time highs, vacancy rates have plummeted, and the housing pipeline is nearly dry. 🏙️🏢 While 485-x aims to address affordable housing needs by requiring permanently affordable units and setting lower rent caps, developers argue that it misses the mark. They say that the higher wage mandates and restrictions will limit the incentive to build large-scale projects, the very thing needed to tackle NYC’s housing shortage. 🏗️ As the city grapples with these challenges, the question remains: Will 485-x be enough to unlock new development, or will it further complicate the path to resolving the housing crisis? 🤔 ________________________________________________________ Are you buying commercial or residential property in New York? The title insurance company you choose to use actually matters a great deal! And remember that it’s your RIGHT to choose the title insurance provider you want to work with. Read ’Top Reasons New York Homebuyers Can And Should Choose Their Title Insurance Provider!’ here https://lnkd.in/efKNzZuv. Questions? Contact us at [email protected] or (516) 741-4723. Hallmark Abstract Service…You Buy Real Estate, We Protect It! #NYCHousingCrisis #AffordableHousing #RealEstateDevelopment #485x #HousingPolicy #ConstructionIndustry #NYCRealEstate #421a #Multifamily #CRE #commercialrealestate #government

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